Inflation, Growth And Unemployment
April 10, 1997
- While any economic policy-maker who raises interest rates even modestly has his critics, few can complain of unemployment at 5.2 percent.
- Greenspan's supporters say his performance seems all the more impressive when compared with that of German, French and Japanese policy-makers -- who have not been able to find a way to spring their economies out of the doldrums.
- Many economists dearly wish they knew whether unemployment rates of 5.5 percent or 4.5 percent spark inflation -- since there would be room to create more jobs for those coming off welfare and others if the lower figure were correct.
- It is estimated that every one-tenth of a percentage point in unemployment represents at least 130,000 jobs.
Moreover, a policy favoring economic growth rates greater than the present 3 percent plus would create those jobs. But would that, economists debate, be courting inflation?
Source: Peter Passell, "Erring on the Side of Fighting Inflation at the Expense of Jobs," New York Times, April 10,1997.
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